The Bank of Canada issues a warning about our financial health, writes Peter Watson.
Several warning signs indicate the financial prosperity of people living in Ontario will decline.
Canada needs to Improve productivity by increasing investments in machinery, equipment, and intellectual property. A senior Bank of Canada official said last week that we have reached an “emergency level.” That underscores the importance of correcting our failing ways.
Other comments included having a stronger focus on training and education plus a more competitive business environment that would result in increased innovation and efficiency.
Without fixing the economic foundation of our country and province, it will be harder to control inflation. As we know, inflation will result in higher interest rates which has a devastating consequence to many households that struggle with mortgage payments and the cost of living.
In simple terms, Canada is falling behind other countries in our extremely competitive world. This could negatively affect our standard of living which will cause many of us to have increased financial hardships.
In sporting terms, it is time to bring our “A Game” in managing our economy. Unfortunately, we are not dealing from a position of strength.
The federal budget is scheduled for mid-April. Disappointing financial realities are expected.
Our individual financial well-being is greatly influenced by the world we live. That includes the efficiency and financial health of our province and our country. Both realities are strained.
This article is not meant to be doom and gloom but to provide a framework for our current economic reality. We as individuals cannot control the economic decisions made by our government.
The good news is we can control many personal financial issues such as spending, saving and debt reduction. These are challenging times.
Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com
